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Comment by vmception | Hacker News Reader

your bank fraud protection doesn't prevent the bank from losing money. banks lose a lot of money to fraud and nobody is prosecuted.

from my perspective, you are comparing a user experience that has nothing to do with the technology.

a bank is a third party service providing custody to bearer instruments.

a future financial institution will be a third party service providing custody or other protections to your crypto bearer instruments.

> If trillion dollar market caps and god-knows-how-many billions of investment couldn't figure out how to protect consumers after 13 years...

there are DeFi insurance protocols, many people get paid back after being scammed, rug pulled, exploited. Look at the source, it is convenient for this to not be mentioned as all chainanalysis does is sell fear to governments to land contracts.

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> banks lose a lot of money to fraud and nobody is prosecuted.

That's true some times, but then it works like an insurance policy to me. I like insurance, especially when it's about my life savings.

> a future financial institution will be a third party service providing custody or other protections to your crypto bearer instruments.

As you mentioned, that's a bank. There's no reason to believe that crypto-based banks will be any better than traditional ones, especially if you compare to newer fintechs.

> many people get paid back after being scammed, rug pulled, exploited

I was not aware of that, thank you. But it's still too few compare to the whole.

There is also defi insurance. And wallets like Argent are working on fraud detection layers within L2 account abstraction (as well as social recovery and ditching seed phrases).

Many people think it will be Fintech in the front, DeFi in the back version of crypto that services mass adoption. The big difference is there is global, permissionless infrastructure for anyone to build tools/apps/services on. No more walled financial system, some kid in India can make a new banking app and it can be as useful as hsbc. They can use the same lending protocols, currency conversion, insurance protocols, and then choose what services they want on top. Maybe someone wants their banking app to be hentai death metal themed and all their moeny to be in picutres of dogs(rather than pictures of the queen or a president). Those who want self ownership and to code their own things, or arent liked by the banks (e.g. sex workers, immigrants, travellers) have just as much access to the system. To me it will be kinda like how lots of people are happy with Windows, but a smaller group like the freedom of Linux.

> There's no reason to believe that crypto-based banks will be any better than traditional ones

That wasn't the supposition. Who cares? Wait I know people that do care, you thought I was one of those? I view blockchains as a platform to launch projects, and crypto as the necessary fuel to use those platforms, I like the censorship resistance but I don't care about the ideologies, I would like to seamlessly move unlimited sums in and out of them and thats that. I care about fulfilling market needs and niches, I don't care about the accuracy of those needs.

Regarding Defi insurance protocols, there is a lot of education necessary and some ease of use improvements necessary.

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